Capital Idea: Northwestern Mutual Cinches $305M D.C. Office Deal
- Jun 25, 2010
By: Paul Rosta, Senior Editor
For the second time this week, a big institutional investor has snapped up a prime office property in Washington, D.C. On Thursday it was Northwestern Mutual Life Insurance Co.’s turn, as the company disclosed its $305 million purchase of Two Constitution Square in the capital’s North of Massachusetts Avenue (NoMa) district.
A 589,000-square-foot office building completed earlier this year, Two Constitution Square is fully leased to the U.S. General Services Administration on behalf of the Department of Justice. DOJ expects to move in by late fall. Platinum-level LEED certification by the U.S. Green Building Council is slated for the summer. Cassidy Turley represented the sellers and developers, a joint venture of StonebridgeCarras L.L.C. and Walton Street Capital L.L.C. Cambridge Property Group represented Northwestern Mutual.
Two Constitution Square is part of the Constitution Square mixed-use project being developed by the Stonebridge Carras and Walton Street. Besides Northwestern Mutual’s new asset, Constitution Square’s 1.6 million-square-foot first phase includes a 329,251-square-foot office building pre-leased to GSA; a 440-unit luxury residential building; a 204-key Hilton Garden Inn; a 50,000-square-foot Harris Teeter grocery store; and 30,000 square feet of street-level retail. StonebridgeCarras and Walton Street plan to build another 1 million square feet of commercial and residential space.
Word of Northwestern Mutual’s buy came on the heels of news that another institutional player has just beefed up its portfolio with a Washington trophy office property. On Wednesday, TIAA-CREF wrapped its $180 million purchase of the venerable Evening Star building from KanAm Grund, the Frankfurt-based investment manager. The 112-year-old, 225,501-square-foot property is fully leased to tenants that range from blue-chip corporations to the Federal Bureau of Investigation as well as TIAA-CREF itself. Other major recent office trades in the Washington market include Edge Fund Advisors’ acquisition of 1350 I Street NW for $209 million and AEW Core Property Trust’s $122 million purchase of Three Ballston Plaza in nearby Arlington, Va.